Global Stocks Tumble Amid Pound's Plunge and Rachel Reeves' Caution

London stocks experienced a decline on Tuesday, with the FTSE 100 dropping by 0.7% following U.K. finance minister Rachel Reeves' comments. The downturn in global equities was compounded by falling industrial metals and heavyweight banks. Meanwhile, the pound fell and UK bond yields dropped amidst cautious remarks ahead of the annual budget.

On a turbulent Tuesday, London's stock market stumbled despite a sharp drop in the pound triggered by finance minister Rachel Reeves' statements. Equities worldwide were hit hard in a collective risk-off move, with the blue-chip FTSE 100 shedding 0.7% by 1120 GMT, potentially marking its largest single-day fall in over two weeks if declines persist.

Industrial metal miners were among the hardest-hit sectors, plunging 2.3% due to a robust dollar that sent copper prices crashing by more than 2%. Major banks faced losses too, with HSBC, Standard Chartered, and Barclays each declining more than 1%. Across Europe, stock markets mirrored the negative sentiment, with Germany, France, and Italy witnessing downturns alongside the pan-European STOXX 600 reaching a low not seen since mid-October.

The warnings didn't stop at Europe; U.S. stock futures also saw a dip exceeding 1%. Concurrently, the pound and UK government bond yields decreased following Reeves' cautionary speech ahead of her second annual budget, highlighting 'hard choices'. Notably, energy company Diversified Energy saw a 9.6% surge after boosting its profit forecast, whereas Associated British Foods dropped 2.6% on potential business separation news.

(With inputs from agencies.)